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Great News for Transaction Levels – Less stamp duty for 98% of home buyers.

The substantial reform of stamp duty announced in the Autumn Statement in December 2014 will mean savings for around 750,000 expected home buyers in 2015. All buyers up to £937,500 will benefit.

Prior to these changes in December there have been areas of stagnation in the UK property market between £250,000 to £300,000 and £500,000 to £550,000, where the previous thresholds led to a significant uplift in the

tax levied at these levels. In an attempt to improve the levels of transactions in these price bands the taxation structure has been replaced by a far more equitable one.

Under the new regime, a homebuyer purchasing a property for £275,00 for example will pay nothing on the first £125,000, 2% on the next £125,000 and 5% on the remaining £25,000 resulting in a total tax duty of £3750 resulting in a saving of £4,500. Under the old rules a homebuyer purchasing a property for £275,00 would have paid 3% on the total price, i.e. £8,250.

Tax Rate (New Stamp Duty) 0%

2% on excess over £125,000 5% on excess over £250,000 10% on excess over £925,000 12% on excess over £1,500,000

Tax Rate (Old Stamp Duty) 0% 1% 3% 4% 5% 7%

This stamp duty reform will fundamentally be helpful for a significant number of people looking to purchase in 2015, especially around the previous threshold price ranges at £125,000, £250,000 and £500,000 where the savings are considerable, and should lead to an increase in transaction levels.

Whilst Stamp duty has increased marginally for those transactions over £937,000, this is far less than the much vaunted ‘Mansion Tax’ that has been muted as part of the shadow governments plans for transactions over £2million and is therefore felt to be good news for purchasers at all levels and fairer.